LexisNexis® Legal Newsroom
Republicans Renew Push to Repeal Medical Device Tax

House Republicans have renewed their efforts to repeal the 2.3 percent excise tax on medical devices, hoping that bipartisan support for a measure introduced by Ways and Means Committee member Erik Paulsen, R-Minn., will protect it from President Obama's threat to veto any GOP attempts to unravel...

The Exclusion for Cancelled Mortgage Debt Income

by Suellen M. Wolfe * Introduction ...As the tax incentive for mortgage debt relief expired at the end of 2013, Congress' 2014 agenda includes tax extenders. Over 50 tax breaks expired at the end of 2013. As part of the tax extenders, Congress is considering extending the reinstatement of mortgage...

The Special Tax Rate for Small Business Stock

by Matthew Cavitch, J.D. * Certain taxpayers can take advantage of a slightly favorable tax rate through the sale of qualified small business stock with timely tax planning. There are several limitations on the type of stock which qualifies and the class of taxpayer which is eligible for this tax...

Estates and Trusts and Final Regs Under IRC Section 1411

Basics of the Net Investment Income Tax. The Net Investment Income Tax (NIIT) is imposed by I.R.C. Section 1411. The NIIT applies at a rate of 3.8 percent to certain net investment income of individuals, estates, and trusts that have income above the statutory threshold amounts. The NIIT went into effect...

College Booster Club Contributions

[1] Introduction Not all transfers of value to qualified charitable organizations are deductible. When you buy a book from the college bookstore, your payment is not a contribution; you got what you paid for. If you give $300 to your local public radio station, and they give you a tote bag, you've...

IRS Ruling: LLC Members Not Limited Partners for Employment Tax Purposes

by Stephen Looney* In CCA 201436049 , (September 5, 2014), the IRS found that members of a management company LLC ("Management Company") were not "limited partners" within the meaning of IRC Section 1402(a)(13) and, therefore, were subject to the self-employment tax on their distributive...

Alcohol Taxes and Incentives - The Spirit of the Law and What's Hoppin'

by Daniel G. Mudd * Basics of Federal Excise Tax on Alcohol Federal taxation of alcohol generally follows the same tax structure and controls as is used with other commodities and products sold in the United States which are subject to excise tax ( e.g. , tobacco, gasoline, etc.). Accordingly,...

Reasonable Cause Exception to Estate Tax Failure to File or Pay Penalties

Editor's Note: Portions of this article are excerpted from Matthew Bender's How to Save Time & Taxes Preparing Fiduciary Income Tax Returns ... [A] fiduciary can be liable for penalties for failure to file a decedent's or estate's tax return and failure to pay a decedent's...

Alcohol Taxes and Incentives - The Spirit of the Law and What's Hoppin'

by Daniel G. Mudd * ... The Basics of the Federal Excise Tax on Alcohol Federal taxation of alcohol generally follows the same tax structure and controls as are used with other commodities and products that are subject to excise tax ( e.g. , tobacco, gasoline, etc.). Accordingly, there are Federal...

Refund Claims Dismissal on Statute of Limitations’ Grounds Affirmed

The U.S. Court of Appeals for the Federal Circuit has affirmed the Court of Federal Claims’ dismissal of a multinational corporation’s refund claims for tax years 1997 and 1998 based upon disallowed foreign tax credits attributable to the corporation’s payment of Belgian withholding...

Proposed Regs Issued on Bona Fide Residency in U.S. Territories

On August 26, the Service and Treasury Department issued proposed amendments to the regulations under IRC Section 937 for determining whether an individual is a bona fide resident of a U.S. territory. [Preamble, REG-109813-11]. In general, IRC Section 937 defines a "bona fide resident" as...

Foreign Earned Income Exclusion Timely Election Rules Upheld

The Tax Court recently upheld the validity of Treasury Regulations Section 1.911-7(a)(2) in a case where the taxpayer sought application of the foreign earned income exclusion (FEIE) under IRC Section 911 , but was denied the exclusion because she had failed to make a timely election pursuant to Section...

New Guidance: U.S. Property Held by CFCs in Transactions Tied to Partnerships

The IRS and Treasury have issued new guidance on the treatment of United States property held by a controlled foreign corporation (CFC) in connection with certain transactions that involve partnerships. The regulations are issued under IRC Section 956 , the Code section under which the amount a U.S....

Guidance on Taxation of Gifts or Bequests from U.S. Expatriates

The Service and Treasury have issued proposed regulations affecting taxpayers who receive gifts or bequests from U.S. expatriates. [ 80 FR 54447 ]. The regulations are issued under IRC Section 2801 , which imposes a tax on covered gifts or bequests received by U.S. citizens or U.S. residents from covered...

GOP Lawmakers Question University Endowments' Tax Treatment

Several House Republicans on October 7 questioned the favorable tax policy afforded to large university endowments at a time when many students are struggling to meet tuition costs, with some lawmakers floating the possibility of legislation to address the issue. At a hearing of the House Ways and Means...

FATCA Taxpayer Account Information Exchange Begins

The IRS has announced that the exchange of financial account information under FATCA has begun, meeting the September 30 date set by the Service. (See the FATCA timeline on the IRS website for important dates at http://www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Timelines ). As noted in the...

Stephen Looney on Fargo V. Commissioner

by Stephen Looney* In Fargo v Commissioner [ T.C. Memo 2015-96 ], the Tax Court held that a couple had ordinary income from a property sale by a partnership in which they were partners because the property was sold in the ordinary course of business. The taxpayer, husband and wife, were partners in...

NYU INSTITUTE ON FEDERAL TAXATION – NEW YORK CITY

The NYU School of Professional Studies Institute on Federal Taxation is designed for the practitioner who must frequently anticipate and handle federal tax matters. It provides high-level updates, practical advice you can implement, and in-depth analysis of the latest trends and developments from leading...

Property Transfers to Partnerships; Controlled Transactions Tied to Partnerships

Notice 2015-54 , 2015 IRB LEXIS 335 (Aug. 6, 2015), announces the future issuance of regulations under IRC Section 721(c) to ensure that, when certain property is transferred by a U.S. person to a partnership with foreign partners that are related to the transferor, the transferor will take into account...

Proving Estate and Gift Tax Value: Evolving Lessons From Recent Cases

[1] Introduction The term, "fair market value," proves one of the most litigated in the Federal estate and gift tax code. Value lies in the eyes of the appraiser, often resulting in wide disparities between the Service's and taxpayer's appraised values. [ See, e.g., Est. of Giovacchini...

Taxation of Charitable Remainder Trust Beneficiaries on Sale of Trust Interests

A charitable remainder annuity trust is required to pay out a fixed dollar amount to the income beneficiary or beneficiaries. A charitable remainder unitrust must in general pay out to the income beneficiary or beneficiaries a fixed percentage of the annually redetermined net fair market value of the...

ALERT! More Corporate Inversion Regs On The Way

The IRS and Treasury have issued Notice 2015-79, 2015 IRB LEXIS 583 (Nov. 19, 2015) , announcing the government’s intention to issue additional regulations targeting corporate inversion transactions. The initial announcement of the government’s plan to issue regulations addressing inversion...

Suellen Wolfe on King v. Burwell

By Suellen M. Wolfe * The Patient Protection and Affordable Care Act (hereinafter referred to as ACA) [PL 111-148, 124 Stat 119 (Mar 23, 2010)] provides for health care reform law in the United States. The ACA consists of the Affordable Health Care for America Act, the Patient Protection Act, health...

Temp Regs Target Withholding Tax Avoidance by Multinationals

Treasury issued a set of temporary and final regulations February 3 that appear to target partnerships that separated creditable foreign tax expenditures (CFTEs) -- in particular, CFTEs related to withholding taxes -- from the related foreign income. The regs (T.D. 9748) bring an end to the questionable...

IRS 'E-File' Back Online; Cause of Disruptions Unclear

A little more than a day after a sweeping outage of multiple IRS filer systems, its cause remained unclear as the IRS restored function to e-file late February 4. In a statement , the IRS said it resumed processing individual and business tax returns at approximately 5 p.m. EST. The Service emphasized...